Nvidia (NVDA, Financial) shares sank Monday after Reuters reported Huawei is about to launch its new 910C AI chips—designed to rival Nvidia's powerful H100s. That's a big problem. These chips arrive just days after the U.S. government banned Nvidia's China-specific H20 GPU line, designed to comply with trade restrictions. JPMorgan now projects Nvidia could lose up to $16 billion in FY25 alone. The hit was immediate: Nvidia stock slid around nearly 5.5% at 10.26am, extending last week's $230 billion market cap wipeout. AMD (AMD, Financial), Qualcomm (QCOM, Financial), and Broadcom (AVGO, Financial) followed, each down roughly 2% premarket.
It's not just a one-off product ban. It's a pattern—and a growing one. Between the AI Diffusion Rule from the Biden administration, capping overseas chip exports, and Trump's new semiconductor tariff investigation, Nvidia's facing a geopolitical pincer move. Even as CEO Jensen Huang touched down in Beijing last week, pledging $500 billion to scale the U.S. AI supply chain, the company is losing ground in its second-largest market. And despite Nvidia's best efforts to build China-compliant GPUs, the U.S. keeps tightening the screws.
Now the political pressure is spilling into public markets. The House Select Committee on China is demanding answers from Nvidia, while Wall Street is asking a different question: are U.S. policies pushing China to build better, faster? Bernstein's Stacy Rasgon didn't mince words: banning the H20 chips is like handing the Chinese AI market to Huawei. And based on Monday's selloff, investors seem to agree. The real risk now? America's trying to defend its lead—while accidentally accelerating the very race it fears.
